Four Indian banks reported a combined net loss of £1.17 billion for the fiscal fourth quarter due to a jump in bad-loan provisions following a tightening of Reserve Bank of India rules. Canara Bank Ltd said its net loss was £486 million for the three months to March 31, compared with a net profit of £21.4 million a year before. Allahabad Bank reported a net loss of £351 million and UCO Bank £213.4 million loss. Dena Bank, the smallest of the four, made a net loss of £122.5 million.
Already burdened by a near-record £95 billion of soured loans as of last year, Indian banks were expected to report a further rise in bad loans in the March quarter after the apex bank withdrew half a dozen loan-restructuring schemes and tightened some rules in February. The government owns majority stakes in 21 lenders that account for the bulk of the sector's bad loans, forcing the government to announce a $32 billion bailout package to help the lenders set aside funds for the soured loans and kickstart new lending. Canara's gross non-performing loans as a percentage of total loans rose up to 11.84 per cent at the end of March, compared with 10.38 per cent in the preceding quarter and 9.63 per cent a year before. Provisions for non-performing assets almost tripled from a year earlier to £876.3 million.
Allahabad, UCO and Dena also saw their bad loans and provisions for bad loans rise sharply in the quarter. Union Bank of India, also state-run, reported a £258.3 million net loss for the fourth quarter. Top state lenders State Bank of India, Punjab National Bank, Bank of Baroda and Bank of India are due to report fourth quarter results in the coming days.
